On June 2, 2025, about 1,000 people lined up outside the Aeon Osaka Dome City store in Osaka before it opened. Some had camped out overnight. They were not waiting for luxury goods or limited editions; they were hoping to buy government-stored rice from the 2022 harvest, which had been aged for two years. Frustrated by skyrocketing rice prices, consumers were eager to purchase the aged rice priced around 2,000 yen.
The next day, convenience store Lawson announced it would sell rice balls made from the 2022-2023 aged rice under the name 'vintage rice.' Online forums were flooded with sarcastic comments like, "Is rice now like whiskey?" and "Does it gain value like old jeans?"
Japan's rice price surge began in earnest during the summer of 2024, marking the start of what is referred to as the 'Reiwa Era Rice Crisis.' A combination of last year's heatwave, which reduced the quality of rice, and an increase in demand due to rising tourism contributed to the situation. Panic buying followed the announcement of a temporary earthquake alert for the Nankai Trough. Supermarkets saw empty rice shelves and imposed purchase limits. Contrary to expectations that prices would stabilize with the autumn harvest, they continued to rise. By the last week of March 2025, the average price of a 5 kg bag of rice in supermarkets nationwide reached 4,206 yen, more than double the price from a year earlier. In April, Japanese tourists were even seen returning home with bags of rice purchased in South Korea for half the price of Japanese rice.
The issue is that even with the government releasing stored rice, prices have remained stubbornly high. The wholesale price of Japanese rice reached 616 yen per kilogram in 2025, while American Calrose rice was around 161 yen. Even after adding the import tariff of 341 yen per kilogram, the total cost for American rice was 502 yen, making it 114 yen cheaper than Japanese rice. Such a price discrepancy cannot be solely explained by short-term supply and demand issues.
So, why have Japanese rice prices soared to the point where consumers are willing to camp out for two-year-old stored rice and tourists are bringing back rice from abroad?
The background lies in Japan's chronic agricultural production cost issues. It is well-known that larger farming operations tend to be more efficient and have lower production costs. The Japanese government has been promoting the consolidation of farmland by transferring land from aging farmers to commercial farms and agricultural corporations. As a result, the proportion of farmland cultivated by these entities increased from 48.1% in 2010 to 61.5% in 2024.
However, the Nihon Keizai Shimbun (Nikkei) pointed out that just because a farm's total cultivated area has increased does not mean that the size of individual rice paddies has grown. If farmland is scattered, even an increase in total cultivated area does not significantly enhance productivity. A rare example is Fukuhara Farm in Hikone City, Shiga Prefecture, which has consolidated fragmented paddies to improve operational efficiency. This farm, which cultivates about 240 hectares, has exchanged land with local farmers and eliminated field borders, increasing the average size of each plot to 0.8 hectares. By utilizing smart agricultural machinery and drones, they reduced labor time per unit area by 30-40% compared to when the average plot size was 0.5 hectares. This indicates that consolidating farmland can significantly enhance production efficiency.
However, consolidating farmland is not easy. The availability and timing of land purchases or leases depend on when landowners decide to sell or lease their paddies. Merging multiple plots requires the consent of all owners, so if even one person opposes or cannot be contacted, the consolidation process can stall.
Nikkei noted that the fragmented structure of farmland is also a legacy of post-war land reform. After World War II, Japan forcibly purchased land from 1.76 million landlords and redistributed it to 4.75 million tenant farmers. The subsequent land law was enacted to prevent the revival of landlordism and protect small farmers by strictly regulating the sale and lease of farmland. Although regulations have been relaxed over the years, the ownership structure of small plots has remained intact.
Policies have also been implemented to create land banks that rent out land from multiple owners to large-scale farms. However, as of the end of March 2025, 1.06 million hectares, or 20% of all farmland, had unclear ownership or could not be contacted. This difficulty in consolidating paddies into larger plots reduces operational efficiency and raises production costs. Currently, Japan's rice production costs are significantly higher than those in the U.S. According to the Ministry of Agriculture, Forestry and Fisheries, the production cost for 60 kg of rice in Japan averages 15,800 yen, which is 4.1 times higher than the U.S. cost of 3,900 yen. Even Japanese farms cultivating over 50 hectares face production costs of 10,000 yen, 2.6 times higher than their American counterparts. This suggests that even if farmland is expanded, scattered plots hinder mechanization and operational efficiency.
As rice prices soared, retailers and restaurants began turning to imported rice. Aeon sold 4 kg of California Calrose rice for 2,680 yen last year, and restaurant chain Kurobuta started using American rice in some of its locations. Lawson introduced Japanese-style kimbap made with Calrose rice this year. The traditional belief among Japanese consumers that rice must be domestically sourced is beginning to waver.
Last year, Japan's private rice imports reached 97,000 tons, a staggering 95 times the previous year. Even in the first half of this year, when domestic rice prices began to decline, about 18,700 tons were imported, reaching 50 times the amount during the same period in 2024 before the rice crisis. In contrast, due to high prices, demand for domestic rice in 2025 was projected to be up to 280,000 tons lower than the Ministry of Agriculture's estimates. Imported rice is not just filling a temporary gap; it is becoming a new option in the Japanese market.
Cheap imported rice provides an immediate escape for consumers and restaurants. However, once the foundation of domestic rice production weakens, recovery will be difficult. The number of Japanese farms and agricultural corporations fell to 836,000 last year, a 60% decrease since 2005, and Mitsubishi Research Institute predicts it could drop to 200,000 by 2050.
In Japan, where securing large tracts of farmland is challenging, some argue whether it is necessary to insist on domestic rice. Japan already relies on imports for 80% of its wheat and 90% of its oilseeds. However, the recent surge in wheat prices due to Russia's invasion of Ukraine and the military conflict between the U.S. and Iran, which has effectively blocked the Strait of Hormuz, has highlighted the vulnerability of overseas supply chains. The choice between cheap imported rice and food security is a complex dilemma for Japan, a situation that resonates with South Korea, which faces similar agricultural challenges.
* This article has been translated by AI.
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